Though America’s economy has shown some signs of health and growth, two experts warn it’s more “wobbly” than it seems.
“The economy is growing. However, the gold price commodity prices are telling us the dollar is wobbly,” Forbes Media founder and CEO Steve Forbes said on a “Kudlow” panel, Monday.
“The Fed’s got problems ahead,” he continued, “and you don’t cure it by raising interest rates and depressing the economy.”
Following up on Forbes’ commentary, ex-Council of Economic Advisors Chair and Trump administration senior advisor Kevin Hassett echoed unstable concerns.
BIDEN MUST STOP INFLATION DENIAL AND QUIT DOING DUMB THINGS
“One of the reasons why retail sales were so strong is that there were really blockbuster sales at gas stations,” Hassett pointed out. “The AAA average price in the U.S. went from $3.30 last month to $3.60 this month, and that’s money that people aren’t going to have to spend on other things. And so I think that the economy is more wobbly than these data suggests.”
Monthly retail sales numbers reported by the Commerce Department showed Americans picked up the pace of spending in March even as they continued to face high interest rates and steeper prices for everyday goods.
Spending on everyday goods including cars, food and gasoline, jumped 0.7% last month, much higher than the 0.3% increase forecast by LSEG economists.
The March advance is not adjusted for inflation, meaning that consumers may be spending the same but getting less bang for their buck.
Forbes and Hassett call this effect the “inflation tax” on average Americans’ wallets.
“Inflation is a tax. And who gets hurt the most? We know who they are: tens of millions of people living paycheck to paycheck and up to their eyeballs in credit card debt, interest rates going up. We’ve discussed here before, what’s the real rate of inflation? It’s not 3%, it’s 7% when you cut interest payments, you have to pay that interest every month,” Forbes explained.
“So Joe Biden’s taxing the people who have the least. Yet he’s babbling on about getting to the rich,” the CEO added. “All this… is not about revenue. This is about control. It’s not about growth, it’s about controlling people’s lives.”
Hassett also put the inflation onus on Biden’s White House, claiming they have no sense of “commitment” to the economy.
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“Your job is to help run the economy and have smart policies. And if you want more progressive taxation, then you could talk about how to do that without harming the economy, but to just lie about it the way they do over and over, it really is infuriating,” Hassett said.
“The share of taxes paid by the top 1% has gone up, not down. And so this idea that you have to raise tax rates because of this incredible injustice in society is just incorrect,” he further noted. “It’s inconsistent with the facts, and it’s just a lie that just keeps on going.”
FOX Business’ Megan Henney contributed to this report.